Distribution of Revenue
The National Lottery generates billions of rand in revenue every year through ticket sales. Find out more about the distribution of this lottery revenue to learn exactly where your money goes when you play your favourite games.
Where Does Lottery Money Go in South Africa?
The money raised from ticket sales is broadly split four ways. The biggest share is to pay out prizes. It's the prospect of winning a major prize which has mostly likely persuaded you to part with your cash in the first place and pay for a ticket, and this helps to create the prize fund.
While the lottery is able to generate so much revenue because it offers such great prizes, the main reason it exists is to make money for good causes. The retailers who sell tickets are rewarded for their work with commission, while the costs of operating the lottery also need to be covered. Find out more below.
The percentage of revenue that goes towards prizes is slightly different for each game, for example it is 48 percent for PowerBall. From time to time more money may be allocated, subject to approval by the National Lotteries Commission (NLC), which regulates the lottery. Overall it works out at 50 percent across all the games, so half of the money raised is therefore paid straight back to players in prizes.
Each game has various prize divisions. While there are some fixed prizes, in most cases the total pool fund is split between all the different divisions and a different percentage is allocated to each. This is why payouts vary from draw to draw, as the exact amount depends on how many tickets have been sold and the number of winners.
Revenue for Good Causes
The National Lottery has a mandate to raise money for good causes. Around 27 percent of the revenue goes towards supporting worthy projects across South Africa. This money is distributed through the National Lottery Distribution Trust Fund (NLDTF) to four different sectors – charitable organisations, sport and recreation, arts, culture and heritage, and miscellaneous. Go to the Lottery Funding page to find out more about the sort of projects that are eligible for funding in each category.
The operator of the National Lottery is required to pay commission to retailers from the revenue it takes in. While playing online is becoming increasingly popular, the retailers do an essential job by selling tickets, promoting games in-store and paying out prizes. There is a vast network of more than 8,000 retailers across South Africa who are registered to sell lottery games, and it is one of the National Lottery's operators main goals to make games even more accessible in remote areas.
There is a long list of costs when running a National Lottery, with employee wages and many administrative expenses. The revenue is used to cover the cost of all such items, including: advertising and publicity, consulting fees, legal fees, lease costs, staff training, outsourced services and recruitment. The ongoing aim of the lottery is to bring in effective ways of reducing these operational costs without impacting on the service provided, so that even more worthy projects can receive funding.
What Happens to Unclaimed Lottery Prizes?
Before prizes are claimed, they are kept secure in a legal private trust known as the NLPT so they are separate from other funds. If prizes remain unclaimed after 365 days, players can no longer come forward to receive them. At this point these unclaimed prizes are transferred to the NLC and they will ultimately be distributed in the same way as the rest of the revenue.
Unclaimed prize money accounts for around 5 percent of the NLC's revenue. Investment income also makes up 7 percent, and the remainder comes from the National Lottery operator's revenue, which is generated by ticket sales.